December 19, 2003
SETTLEMENT RESTITUTION CHECKS GOING OUT TO THOUSANDS OF MARYLAND
Million Mailed to Marylanders as Result of Landmark Settlement
General J. Joseph Curran, Jr. announced today that checks are being
mailed this week to the 13,565 Maryland mortgage holders who are
due restitution under the State's $12.8 million settlement with
Household International. The consumer payment program stems from
the landmark settlement, finalized in December 2002, between Household
International and the attorneys general and banking regulators of
all 50 states and the District of Columbia.
The settlement resolved an investigation by the states into allegations
of unfair and deceptive mortgage lending practices by Household
International, which is one of the nation's largest sub-prime mortgage
lenders through its subsidiaries Household and Beneficial Finance.
The states alleged that Household had overcharged borrowers with
fees and interest, and had misled borrowers about other loan terms
such as prepayment penalties and credit insurance.
Under the settlement, Household agreed to implement a series of
reforms in its lending operations. Court injunctions in place in
all 50 states restrict prepayment penalties on current and future
home loans, prohibit loan "flipping," limit up-front points
and origination fees, and improve loan disclosures. Household also
agreed to pay $484 million dollars to the states to be distributed
to eligible Household borrowers. The monetary settlement was the
largest ever obtained by state attorneys general in a consumer protection
"I am very pleased to see the money on its way to the Maryland
borrowers who were hurt by Household's practices," Attorney
General Curran said.
"I am very satisfied with this outcome on behalf of the borrowers
in Maryland," said DLLR's Commissioner of Financial Regulation
Charles Turnbaugh. "Not only does it protect borrowers from
the inappropriate fees charged by Household, it reimburses them
for their unfair treatment."
Consumers who obtained a mortgage loan directly from Household from
January 1999 through September 2002 and who filed claims forms will
receive payments. The amount consumers will receive was determined
by the specifics of their loan; the smallest award was $106.51 and
the largest $11,299, with the average award being $944.53.